The stock market experienced record-setting highs on Monday, with the Dow Jones Industrial Average rising 228 points to surpass its previous all-time high. The S&P 500 index also climbed within 0.6% of its own record set in July, while the Nasdaq composite slipped slightly as tech stocks gave back some recent gains. Despite this, most stocks rose on Wall Street, with Oracle’s gain of 5.1% and Alcoa’s jump of 6.1% contributing to the positive momentum.
Investors are eagerly anticipating the upcoming Federal Reserve meeting, where the central bank is expected to cut its main interest rate for the first time in more than four years. The potential rate cut has sparked excitement in the market, with traders increasingly betting on a larger-than-usual move of half a percentage point. The outcome of the meeting and the size of the rate cut will have significant implications for the economy and inflation.
A half-point cut by the Federal Reserve would likely have a positive impact on the stock market in the short term, according to strategists at Morgan Stanley. However, concerns about a potential recession and the overall health of the job market could dampen the market’s reaction. The focus will be on how well the job market holds up in the coming months, as weakness in employment could lead to a drop in stocks regardless of the rate cut size.
In the bond market, yields on Treasury bonds eased ahead of the Federal Reserve meeting, with the 10-year Treasury yield falling to 3.62% and the two-year yield dropping to 3.56%. Despite positive economic data showing manufacturing growth in New York state, concerns about high interest rates and other factors have been impacting bond yields. Meanwhile, stock prices of companies like Icahn Enterprises and Mosaic saw mixed movements based on individual factors such as legal proceedings and production challenges.
Overall, the S&P 500 rose by 7.07 points to 5,633.09, the Dow added 228.30 points to 41,622.08, and the Nasdaq composite fell by 91.85 points to 17,592.13. International markets also saw mixed results, with Hong Kong’s Hang Seng adding 0.3% amidst data showing a slowdown in China’s economy. Markets in Japan, mainland China, and South Korea were closed for holidays, highlighting the global nature of the financial landscape. Traders are closely watching the developments in the Federal Reserve meeting and the outcome of the rate cut decision for potential future market movements.
